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BHP plotting a life after CEO Kloppers

Brian Robins and Georgia Wilkins

HARD on the heels of write-downs at its ill-timed US shale gas acquisitions, BHP Billiton chief executive Marius Kloppers has been hit by renewed speculation that the company is searching for a replacement for him after five years in the top job.

''We are not commenting on the specifics … but succession planning for the CEO and senior management team is an ongoing process and one of the most critical tasks of any board,'' BHP said.

The latest round of speculation was started by a report in the Financial Times, a UK newspaper, overnight on Wednesday that the process could take up to two years to finalise.

Future unclear: Marius Kloppers. Photo: Arsineh Houspian

The talk of his replacement comes as chairman Jac Nasser is in his third year in the position after joining the board in mid-2006. One of the key tasks of any chairman is to help chose a chief executive, if change is needed.

Mr Kloppers was appointed chief executive in October 2007, replacing Chip Goodyear.

Internal candidates could include divisional heads such as Andrew Mackenzie, Marcus Randolph and Alberto Calderon, although all are older than Mr Kloppers, which could complicate any quick decision.

As a result, securities analysts yesterday were unwilling to engage in the speculation until they have a clearer view of what the timing of any change may be.

The purchase of shale assets in the US in particular has weighed on BHP Billiton's performance following the sustained fall in US domestic gas prices, amid concerns they may not recover.

This forced BHP to book a $US2.84 billion write-down against its investment here, with both Mr Kloppers and the petroleum division head Mike Yeager missing out on bonuses as a result.

''We remain of the view that the investment in US onshore natural gas and liquids is the right decision for BHP Billiton shareholders,'' Mr Nasser told shareholders at last month's annual meeting.

Along with overpaying for the US shale assets, Mr Kloppers has been criticised for failing to achieve large acquisitions, such as the earlier proposed mergers with Rio Tinto and Potash Corp of Canada, although in retrospect the failure of the Rio move has been to BHP's advantage.

While BHP has routinely chosen internal candidates to run the company, the most recent external appointment was Paul Anderson, who was appointed in 1998 from Duke Energy.

Anderson's appointment was praised at the time because he inherited none of BHP's deep-seated conservatism - conservatism which the company has failed to shrug off by installing internal choices to run the company since, bar the brief experiment with Brian Gilbertson, whom it inherited from the merger with Billiton in 2001.

Mr Gilbertson quit after six months, citing differences with the board. The speculation over Mr Kloppers' future also comes amid a wave of change at the top of mining companies globally, with Anglo American's chief executive, Cynthia Carroll, to step down. This comes ahead of the ouster early next year of Mick Davis, 54, as chief of the merged Glencore-Xstrata.

Almost a year ago, BHP's chief financial officer, Alex Vanselow, quit, deciding there was unlikely to be any change at the top any time soon. Mr Vanselow has been mentioned in connection with the opening at Anglo American.